tv On the Move Bloomberg August 3, 2015 3:00am-4:01am EDT
they are three of the things i'll be talking about through the morning. futures in london a little bit lower. dax futures off by about 20 points. a very special treat for the market open. manus cranny, over to you. inus: european stocks put probably one of the best weeks in the months of july that we seem since february. the rally is 1.5% over the space of july despite the fact that this market was closed. it is anybody's guess. there is an exchange rate in the united states of america. hans will take you through that. that exchange rate problem was down over 17% in the hiatus. will they go for a ban on short sales? those are some of the questions we are asking. china, factory orders at a five-month low. what will the preemptive policy be? what impact will it have on european markets.
european equities are going to be more profitable than the united states for the first time since 2008. earnings will rise just under 7%. that is up from just under 5%. u.s. wages rose at this lowest pace since 1982. what does that do for the debate about whether you get a september lift off from the fed in terms of raising rates or december? harris is opening flat. london is down by an eighth. you've got billy real and intercontinental. iron ore as retreated back to 50% from its peak. china storyng that play out on rio and billy in terms of the reality of the slowdown in china. what happens next in terms of stimulus? hsbc up 1.64%.
pretax profit rising. they are selling the brazilian asset. they took a little bit of a hit. a couple individual names. nokia, heineken, i'll just show you those, hsbc up 1.3%. heineken up 1.9%. not a bad report from heineken. anna spoke to the world's number three brewer. they will see a moderate level of growth in their volumes relative to 2014. up 2%. the market likes heineken. jonathan: a little early. maybe in a couple hours. that is your market open. stocks a little higher across much of europe. a touch lower in london. over in asia, it is about china. david ingles has your market wrap. david: very good morning to you. it is 3:00 p.m. here. perhaps a bottle of heineken.
not bad at this point. it was a rough day. i will get you the read across the asia-pacific in a moment. let me get you the shanghai composite. fairly volatile. about 34, 35 times it changed direction. not just a small move. something i want to mention as well, take a look at this. 3622. there was a brief scare at one point. we were actually down over 3% briefly, falling below this key average. from the people we talked to here, beijing had to defend that line. let me draw it roughly for you here. that line roughly goes like this. about here, then a bounce back up. right now, we are clearly above that level. that is about 60 points maybe above the moving average, below which of course, we don't know
what is going to happen. another day that we've managed to close above that, but that's only shanghai. the other chinese indices not doing quite as well. the tech index down closer to 5%. shenzhen down about 2.5%. well, thistion as pmi data out of china, we had two readings. put those things together and you do have a better picture of how bad the situation is getting. running the risk of exaggerating , things aren actually looking a bit worse. official pmi came out saturday at 50. you look beneath the hood. new export orders, in put prices, inventory, all falling from june levels. you look at the other measure of pmi, the privates are they -- , 47.8.vate survey it wasn't only in contraction,
it was well in contraction. below 48 for the first time in several years area -- years. all this risk aversion playing into equity markets. china, we talked about that. taiwan, australia, japan, south korea, all ending lower. jonathan: david ingles with a drawing of the average that does look like it has had a couple pints of heineken. thank you for joining us this morning. in beijing, nick wadhams is standing by to break down the latest numbers out of china for us. one pmi says things are pretty ugly. another reading says things are kind of ok. which should i be paying attention to? nick: i think what you want to look at is sort of a broader picture of disturbing numbers coming out of the chinese economy. you have these two indices. we had car sales figures from june down. bloomberg's own estimate of
china's economic growth in the first half was 6.5%. the government has set a target of 7%. what we are seeing are rumblings, tremors, that the government may not hit that 7% growth target. ago,han: a couple months we saw how active the government got when a market rout threatened their credibility. does it look like they are going to have to act again to get that edp target? week, if there had been any doubt, there really isn't any more. the premier said the government would take preemptive steps. what we are seeing is a potential interest rate cut, a cut to banks' reserve requirement ratio. the government has announced they are going to boost spending on tourism and infrastructure in cities. it looks like they are taking some smaller steps, bringing out
the bigger guns further down the line once we get a better sense of how things are shaping up by the end of the year. jonathan: nick wadhams, thank you for joining us this morning. rama nikita, global asset allocation strategist at ubs, joins us now. great to have you with us. 2015-16, 6.5%for next year. let's talk about this year first. 6.8%. does that fit with the definition of about heaven percent -- about 7%? >> i think the important thing is they've got a lot of policy and place to prop of that property market. they've cut the minimum down payment on a mortgage to about 30%. they could cut that further. they also have -- it is interesting, they also have these infrastructure spending,
which will probably boost gdp. network improve, that could create a bout for cover. if you look at the iron ore price, which is a good indicator, that is catastrophic. if you look at the cover price, that has also tumbled massively. and four cities are still overloaded with property. we expect this oversupply to continue. that is not going to be fixed quickly. there has been a wealth effect from the fall in the shanghai composite. that could have a drag effect. overall, not a fantastic picture. the equity markets, i think that is dragging down the h-sharemarket in hong kong, which has created opportunities. the a-share market is based on leverage and on policy.
i think that is much harder to call. jonathan: any opportunities in the fx market? will we get a bounce in the wider commodities space? when i look at the canadian , andr, the aussie dollar then look at the kiwi, where do i go? what is the opportunity? ramin: i think it is going to be week for a while because of the chinese story. the way we decided to play it through fx is to go short aussie dollar, long renminbi, or go long canadian dollar versus short renminbi. dollarlong canadian versus short aussie dollar. , we think thelar best way to play that is to go short. jonathan: are there any proxies in europe for china slowdown? do i look to the dax? ramin: we think the european market is very unaffected.
that is largely a domestic story. we go for the domestic play. we go for banks, cyclicals, because those are the places where the increase in credit impulse is positive in europe. that's one of the reasons we like it. obviously the fx story. we are seeing the maximum effect of that on earnings. also, we see an improvement in lending. also, we see margins improving in europe and starting to equalize that gap with u.s. margins. jonathan: i reflect on an interview with lloyd blankfein that we did at bloomberg tv. he talked about china. he talked about making an adjustment that many countries took a century to do. statement,ok at that on the journey to making this adjustment, how close are we to an accident in china? ramin: i think we are a long way away. the policies have done exactly what we hoped they would do.
they made it easier for people tomorrow. they created liquidity for the banks. they are going to make sure that stays in place. they have policies so that the extra housing is being bought up by the local government. they are trying to fix the government debt problems. a lot of the steps are spot on. jonathan: run in the he's a is going to stay with us throughout the hour. coming up, the athens stock exchange reopens for business after a five-week shutdown. we bring you the first trade live from greece. reports and 18% jump in second-quarter profit. and then, mining the commodities rout. taking advantage of the price plunge. those stories and many more throughout the next 60 minutes. good morning. ♪
jonathan: good morning. i'm jonathan ferro. we are live from the city of london. let's get you up to speed with bloomberg's top stories. the athens stock exchange is set to reopen today after a five-week shutdown. a host of restrictions will govern trading. the whole -- the hall in trading was a blow to owners of greek equities, wiping 85% of the market value. nokia is selling its map unit to
daimler for 2.8 billion euros. the luxury automakers first approached nokia about a sale. the unit supplies mavs eta -- data in north america and europe. heineken beat estimates. the company introduced new products to drive demand. bloomberg spoke to heineken's ceo earlier. >> essentially, what we do is boost the premium part of our portfolio and boost the innovation part of the folio with increase in margins. that will continue. jonathan: on to hsbc now. europe's largest bank out with numbers this morning. pretax profit climbed 10% in the first half. the bank also announced an agreement to sell its brazilian unit for $5.2 billion.
they also took a $1.3 billion fx provision. stephen morris joins us now from our. ramin nakisa still with us to break down the earnings. stephen, the highlights from the numbers, i had to break down a million different numbers. what were the highlights? >> we have seen the performance from their investment bank especially in the asian region, which is accounting for a larger percentage of pretax profit. the negative on the results was definitely the $1.3 billion foreign exchange chart. the cost of that keeps rising. it has taken a big chunk out of the actual headline, the investment banking numbers. they also did well in wealth management in asia, which shows this pivot from its london headquarters to focus on its markets in asia. jonathan: everyone seems to be streamlining their geography. barclays, they want to focus on europe in the u.s.
hsbc now pulling out of latin america. in terms of cost cutting, is that it now? stephen: hsbc is targeting growth in revenue, but yes. for the most part, people compare it to trying to turn around a supertanker. hsbc has a two point really in dollars -- a $2.3 trillion balance sheet. it does appear that with brazilian business going, restructuring in the u.s. and mexico, it really is a cost-cutting story at the moment. jonathan: what is next for them? stephen: we have to think about the ceo and chairman. both of them have been in place for a long time. the results show their strategy is starting to work. next is to settle the rest of their outstanding conduct issues, try to get all the one offs off their balance sheet, and start talking about their
underlying businesses. jonathan: wouldn't we love to do that? but when you look at the quarter for the banks so far, the banks are beating. what is the story? ramin: they are making up over 100% of earnings growth. you had a drag from things like energy and food producers. that has been put in line with our view. you see and improving credit impulse in europe. if you see cyclical improvement, the banks benefit. it also makes a massive chunk of the index. if you are bullish on europe, you have to be long banks. jonathan: what is going to be the tailwind that drives us through 2015 and into next year? ramin: operational leverage is very important. when you look back to 2011, when we saw a slight improvement in the top line, the bottom line improved massively. they made the cost of production. i think that is going to boost the bottom line.
the banks are one example of that. stephen, we are talking about the operations, but obviously the other big headline is the fx provision. how long will it take to get through the fx probes that have started, that some people have begun to look at settling? hsbc thought they were over a hurdle. how close are we to waking up, looking through the earnings, and not talking about this anymore? stephen: at least the end of the year. none of these legal situations seem to be resolved very quickly at the moment. hsbc and standard charter still have monitors within the banks checking on their internal procedures. essentially long-term unless they can demonstrate that they are getting a grip on their employees' behavior internally. we could see conduct issues rumbling on. jonathan: just to wrap up this
segment on the banks him a if i'm not investment in banks -- to wrap up this segment on banks, if i'm not invested in banks, and i see a provision of $1.3 billion and a stock up 1.5%, do they matter at all? when you try to reconcile the numbers with the actual stock price movement, quite often, it doesn't add up at all. ramin: a lot of these are legacy issues. there's been a massive cultural change within the investment banks. there's a massive increase in the number of actual prosecutions of bankers who've misbehaved. we are all of their the culture hasn't changed. i don't think there's going to be as much of this litigation in the future. jonathan: gentlemen, thank you very much for joining us. stephen morris, ramin nakisa. we are just moments away from
the reopening of the athens stock exchange after it was shot for five weeks. a host of restrictions will apply. hans nichols is in athens. it is reopening, resuming trading, but there are a lot of restrictions. run us through them. hans: this is a half reopening. the restrictions are mainly on greek domestic sellers. buyers don't have any restriction except that they have to come up with new money. behind me, you see the athens exchange. what it really is, it is an attempt to prevent a backdoor for capital flight. that's the big concern. that's why we have so many restrictions in place area -- in place. they've put out numbers in terms of where they are in capital. all roughly in line with estimates. what we have here today, opening starting in about 15 minutes, we are going to see just how far this exchange has come, how
vulnerable it is, and how much price swings will be taking place. there are new provisions that make it easier to halt trading if indeed there is a precipitous drop in a stock. the old rules, where it went down 5% in a 10-minute -- excuse me, 10% in a five-minute devonte, they hauled trading. rules, there are going to be some itchy triggers to stop fast declining stocks. that's one of the safeguards they have in place here. jonathan: if we were to play ase open guesses, let's make an educated guess. what are the estimates for the open? the teens. that's an educated guess. we are basically following an exchange trade that dropped about 17%. no one has a great sense. people are predicting the bank stocks will be down 20% to 30%.
the banks need to be recapitalized. that is not a difficult equation to figure out. in terms of the other part of the athens stock exchange, that is where the guesswork comes in. we are seeing ranges from the teens to the 30's. that is where the ranges are. we won't know until it starts trading. we are going to have a great guest in about 10 minutes time. ear,e london gets in my tells me how far down the exchanges going. we will get immediate reaction. jonathan: hans nichols, we will bring you the live feed. we will bring you the athens stock exchange open in seven minutes time. let's welcome back in ramin nakisa. guess something like this, when a market has been shut for the whole month of july, and in between, you have seen a real fundamental destruction to an economy?
what is the story? ramin: i think this is a really interesting test of the etf market. that provided liquidity even though the underlying market was shut down. that is a thing to watch. 17% fall, that is what we should be looking for. that gives us the best indicator. that's the way i see it. i see it as etf kicking the tires exercise. another etf actually shut down. that one continued trading. jonathan: what kind of people step back up and step back in when they see this market crushed? ramin: if you can wear volatility, this would be a good buying opportunity if you are domestic and can take massive losses. if you are a fund manager, i would be keeping well away from that market. we could have another election in august or in the autumn.
we also have this large redemption coming up for the ecb on august 20. very quickly, that august 20 redemption, is that being complicated by the imf or are we in for a repeat of june? ramin: it is definitely complicated. the debt is unsustainable. that is true. that is a problem and it is not resolved. there are still problems in the offing. jonathan: can they resolve it in three weeks? ramin: i don't think so. jonathan: ramin nakisa, thanks very much. we will be back in about two minutes time. we will bring you all the market action from athens. stocks resume trading in about five minutes time. we are 26 minutes into the trading session in europe. let's get you up to speed. the ftse 100, we are pretty much dead flat. down about 0.1%. the dax also lower this morning,
down by 0.2%. the shanghai composite closed monday down 1.1%. manufacturinge of not painting a pretty picture. down,ndicated, that pmi and contraction territory for a fifth straight month. switch up the board and check out the fx market. cable, one pound buying me $1.56. what are we coming up for this currency pair? thursday, a bank of england decision and minutes all at the same time, then the forecast from the inflation report, then that thursday, governor mark carney will take to the podium to deliver his news conference. on friday, payrolls day. at 70 pence. as manus cranny said earlier, bnp paribas was the target of 6750.
jonathan: good morning and welcome back to bloomberg tv. we have 30 minutes into your trading day. here's a picture of the markets this morning. the ftse 100 down. by dax also in the red, down 60 points. the shanghai composite closing low were also, down by 1.1%. the private gauge of manufacturing not pretty, in contraction for a fifth straight month. talking about ugly things, the athens stock exchange due to open any moment now. we will bring you the price as it comes through. hans nichols is standing by at the exchange with a guest.
over to you. hans: jonathan, thank you for having me and i think our guest for joining us. he is the vice president of the association of members of the athens stock exchange. you had a quiet five weeks. now things are going to start again. what do you expect? >> the market was closed for a month, so any open would have been difficult. there's going to be volatility. with the creation and regulation of the capital flow, that will make it even harder for the market to stabilize. hans: so some of the numbers we are going to get here shortly won't be that accurate? >> it wouldn't have been that accurate anyway. it has been one whole month. the first five minutes or even an hour would be imbalanced. i think as time goes by, the market will take over and create equilibrium. the problem is that with the
regulation of the capital flows to the financial instruments, we created an imbalance that will stay for a few days at least. that creates a problem. hans: who is really harmed by this imbalance? foreign investors, domestic investors? >> the first victim is the market. with the regulations, you create an impeded buyer. the buyers are almost not there. you have no restriction on the sellers, so you create an imbalanced market. that could create a problem for the market. let's not forget, this is the market that brings the funds to help the companies. hans: and that has to do with foreign investment, getting the economy going again. is the athens exchange going to be an attractive place for foreign investment? >> i believe it will. for the time being, it will
create such an imbalance and maybe a difficult time for anyone to be able to make a decision whether they want to invest or not. least time this takes place, the better. hans: what do you expect in terms of the bank stocks? if you create a bad bank, could that be priced in? >> it could help. but then again, we have to know the way this bad bank will be created. i'm not going to guess. there's no point. there's a market imbalance. it would be black. hans: would you be surprised if it is more than 30%? >> in the first five minutes or one hour, no. hans: what about the overall exchange? where do you see it ending? >> jonathan: -- >> i can't really say. it is not the market i've known
for all these years. anything could happen. it could be on the plus side. it could be on the minus side. impossible to tell in a market that is imbalanced. hans: how far are we away from the lifting of capital controls? if we have a soft open, almost a half open of the athens stock exchange, how far are we from lifting capital controls? >> it is all connected together. it has to do with the agreement for the creditors and the country. theas to do with how fast government can create confidence in the banking system. it is a lot of factors to put together. i see the government trying to make a change to the right direction to getting us out of the crisis. hopefully it won't be more than a few days or a week or two. hans: so you see end of capital controls sometime this month? that is based on what you are
seeing from the government? >> i'm hoping, yes. hans: the european central bank has put clear restrictions on the ministry of finance. you've been quite critical of the ministry of finance. isn't your real criticism with the european central bank? >> it is not that clear. the responsibility lies with the greek government. ecb had to put those rules under their constitution. the sooner the creditors and greece find an agreement, the sooner the ecb will be able to release the capital controls. i do think the ecb should be able and should ask for the advice of the professionals of the greek stock market. hans: we are down 11%. ranges yout within
would have thought? >> sure. hans: outside of the banks, is there any sector you think is going to go up today? is there anything you think is a real buyers opportunity? >> i think there are a lot of sectors that should go up. but when investors have the market closed for one month and suddenly they open, there needs may have changed. maybe that will pressure even the sectors that would help go up. hans: which sectors was that be? >> all the public utilities. all the companies that do a lot of exports. hans: thank you for your time. with that, jonathan, back to you. if you want to buy shares in public utilities, that is your advice. we are live outside the athens stock exchange, which has just opened after 25 days of being closed. jonathan: thank you very much. checking the market moves, 22%
in the red. there is a negative sign before that. a huge move lower. the biggest move lower on record. low, the biggest move lower on record. the bank is getting crushed. ras bank down by 30% on my screen. ramin nakisa still with me. 29.92% onis, down by the athens bank index. a lot of these banks will be halted. when i look at these moves, what am i thinking about? is this a frontier equity market now? >> ramin: it is certainly behaving like one. i think it is impossible to call. it is not really fundamentals that are driving this market. it is politics. tsipras has made a promise to the troika, the institutions, which he probably won't keep
given the history of greece's fiscal reforms. i think we have to see some signs that they are going to keep the reforms they've promised. i think that's unlikely to happen. there's almost certainly going to be another hiccup down the road. jonathan: the other thing you've got to do is try and price these things. you try to price the stock of national bank of greece, you don't know how much capital they have to raise. you don't know if there's going to be mergers. you don't know anything really. you could be down as much tomorrow again. how do you price any of these companies? ramin: i don't think it is fundamentally driven. horizon,ve a long-term people who don't mind a 50% loss, you buy when other people are fearful and you are greedy when other people are selling off. you have to be very contrarian to buy into this market. jonathan: what do you make of the restrictions, when new
buyers can come from abroad? how many of them will there be? have they been misjudged? ramin: obviously, they had to have some kind of constraints in place. otherwise it would have been worse than it was. you can't really regulate for this market to recover. it is going to be ugly at the moment and will be volatile. prices will be distressed until they have some kind of resolution, which could take years. jonathan: ramin nakisa, thank you for joining us this morning. green bankshares down 30% at the market open. the athens stock exchange down 22%. stay tuned the bloomberg tv for more on this story. "the pulse" will be speaking to the ceo of the athens stock exchange. that is at 10 past 10:00. coming up, mining the commodities rout. gold trades at a five-year low. cover extends its monthly drop.
manus cranny has a couple of them for you. manus: let's focus on some of the good news in the market. in the business of letters, parcels, coming in with underlying profit that beat analyst estimates. that stock is up nearly 7%. no dividend for 2015 but they say the guidance for the second half of the year is improving. rsa, this is the insurer. what we are hearing is that we got their earnings this week. they are under the gun. will hester push for around 600 and? stock trades at 520.5. the ft quoted saying that hester is open to a sale, but will it flush out other potential bidders? heineken, the world's third-largest brewer, doing
quite nicely. adjusted earnings rising by 6.5%. pricing, they will have challenges. this is an emerging market story. western europe declined, but nothing nearly as bad as the market had suggested. newly modified products, premium-ization, coming up with new products, added 850 million euros to the heineken numbers. let's bring up some of the movers on the athens stock exchange. a five-week shutdown. we open substantially lower, down over 22%. the banks are down 30%. us bank, look at those moves. down by 30%. alpha bank and euro bank also down just as much. we will keep you updated on that
throughout the morning. the ase opening down over 22%. the biggest one-they drop on record. time to talk about another sector that had as rough a ride this year as the athens stock exchange, the commodities sector. the first half of 2015 saw a sharp uptick in the number of private equity investments in the mining industry. this according to a new report by our next guest, alexander keeton. he joins us now. great to have you with us. up whennt is picking the sector is on its knees. this is kind of how things go. talk to me a little about it and some of the deals being made. the mining industry has been experiencing difficult times. it is difficult for companies to get debt. the major focus is returning money to their investors. private equity has seen this
opportunity and over the last few years, investment has been raised to go into the mining industry. that didn't immediately translate into deals. people have been watching to see whether the private equity deals start to pick up. now we are sort of 2-3 years after the funds have raised the money. they are under pressure to deploy it. we have seen a sharp uptick in deals. we saw 51 deals and 1.7 6 billion go in. that is more deals than we saw last year and the same amount of money that we saw in the whole of 2015. jonathan: i see them going into gold. gold is on its knees. what is the doing going into gold? although gold miners and commodity prices have been affected by the market, it has not been affected as much as some commodities. for private equity, it represents an attractive area to invest in.
it does still have quite a good price. the cost of bringing a gold mine into production is far less than , wheremine or another you have to invest a lot in infrastructure. private equity can see a route from their investment through to production. jonathan: pe doesn't just one equity. talk to me about that. alexander: a very interesting development is that alongside the equity investment a number of the deals, about 20%, actually had the private equity funds taking an interest in the commodity. whether that's actually a right to buy the product or a percentage royalty on sales by the mining company, that's a new development. it does suggest that the equity investment alone isn't enough for the private equity funds to generate returns. jonathan: are private equity firms beginning to compete with each other? alexander: we have seen a lot of
competition between the mining companies for investment. that's a good thing for the industry as a whole. for the private equity funds, i think it is quite difficult for them all to find invest in's ickt -- investments that t the criteria. jonathan: you see this boom in pe and the elephant in the room is washington, d.c. and the federal reserve. what has fascinated me across the extraction industries is that you have this commodity rout, oil, copper, gold, and we start talking about how these companies will struggle to finance them selves. then you see this explosion of money. is it the same with the mining industry? what happens when interest rates start to rise? will that full of money still be there? alexander: that pool of money has been handed over by the pension funds to the private
equity firms. they've got the money. they are keen to deploy it. they will deploy it. jonathan: alexander keepin, thank you for your insight this morning. coming up next, we are live from athens as the ase opens down more than 22%. we will bring you the details on the rout in greece after the break. ♪
jonathan: good morning and welcome back to bloomberg tv. let's get you up to speed on some of the data coming in this morning. french manufacturing coming in at 49.6, in line with the preliminary reading. german manufacturing pmi will come through in just a couple minutes time. the big story in the last 22 minutes, the athens stock exchange. opening more than 20% lower. hans nichols in athens with more. the mood on the ground, i imagine it is not a very happy one. hans: everyone is looking at this exchange behind me, wondering how accurate it is. how precise are these was with the restrictions that are in place? ,he guest we were talking to they were saying it is going to impede the market from accurately pricing shares. greek banks are down.
most of them have hit that 30% limit. many of them up here to have stopped trading. not sure if that is an official halt. they appear to have stopped trading. the latest numbers we have, at the stock -- athens stock exchange down 22%. initially, it was down 11 percent. there is going to be a lot of volatility. that is what the experts, the traders that were behind me are saying. even at the end of the day, this market may not be priced accurately. we may have to wait a couple more days. so far, this does not look like a pretty great story. jonathan: just to follow up, talk me through the restrictions. i listened to your last guest and he mentioned that perhaps some of these restrictions might amplify the move lower. what is the story there? hans: the restrictions are just on the buyers and they are just on greek buyers.
that means there are fewer buyers snapping things up. that could lead to lower prices overall. because these restrictions require you to come up with new money, or money that you can prove came from abroad. none of these restrictions apply on foreign investors, provided they've had a foot in the exchange, they've been trading already. those are the restrictions in place. they are coming under criticism from the association of the athens stock exchange. they are upset with how this happens. they say the real victim isn't buyers or sellers, but the market. jonathan: hans nichols in athens. thank you very much for joining us. that's almost it for this hour on bloomberg tv. manus cranny joins us for a look ahead to a huge week. i look at the ase, underlying the tragic story in greece, but it doesn't affect many investors in london.
what will is thursday and friday. manus: the bank of england's new regime under mark carney will deliver not just the rate decision but the minutes of the previous meeting along with the inflation report. the sense seems to be from the conversation you and i had with bnp paribas that the markets are taking quite a bearish view on the euro, a bullish view on sterling. you have an underpricing in terms of the potential. they are going all in on this trade. they want you to buy euro-sterling -- sorry, by sterling, sell euro. with a target of 67.5 in terms of that objective. they see the market pricing in dissent from two of the members of the monetary policy committee. they say you could see a little bit more, which would be 63. in other words, 3%.
that is 30% more than the market is already pricing in. there's not much difference between three people governing and everybody voting for rate hike. upset says, don't get so by the lack of wage data. a historic record low. he is focused on the unemployment rate. that will be the much more relevant piece of information. it just depends. flip a coin. one will say wages matter. another says, don't worry about wages. either way, we are on a knife when theo when, if and federal reserve raises rates. jonathan: manus cranny, the bank of england thursday, then friday payrolls data. german pmi a fall from the previous month. better than the preliminary readings. a littleacturing data
francine: the athens stock exchange plunges as it reopens following a five-week shutdown. we speak to the ceo later in the program. hsbc is selling its entire business in brazil for more than $5 billion. that as the bank beats estimates. china slowdown. the stock slide deepens as the factory gauge slides to a two-year low. welcome to "the pulse" live from